Corporate welfare about the good of the few

By Bennie Wilson :
April 25, 2014
: Updated: April 29, 2014 2:49pm

Farm bills typically contain social welfare provisions. It is also a glaring example of corporate welfare. The farm legislation funds federal nutrition programs including food stamps, as well as subsidies to farmers.

Bennie Wilson is a senior lecturer in management at the University of Texas at San Antonio.

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SAN ANTONIO — There is the perception that conservatives believe that the “Holy Grail” of capitalism in a democracy is an unrestrained, free, and open market that stimulates economic growth and prosperity for all Americans.

As with many perceptions, this one depends on who is doing the perceiving.

At the risk of being labeled a “flaming liberal” with pinko commie anti-capitalist leanings, a name-calling proclivity of some of my more radical conservative brethren — I prefer the label “compassionate conservative”— let's review the issue of welfare.

Not social welfare, but corporate welfare.

Let me emphasize that most of us conservatives see a healthy, vibrant business environment as one of the indispensable elements of our strong economy and the bedrock of American ingenuity, innovation, and prosperity. But corporate welfare refers to the legal “freeloading” of huge companies and industries that feed at the public trough through both economic success and setbacks.

Witness the trillion-dollar bail-out of alleged too-big-to-fail corporations during the latest recession.

This is not an indictment of all, or even a majority of large corporations. Rather, it is a reflection of the relatively few huge organizations, including our bloated federal government, that control — and artificially manipulate — the reins of political and economic power at the expense of the middle class and the poor.

This largely unabated good ol' boy (and girl) corporate network is not about the “common good”; rather, it is about the financial good of the few.

Most of the culprit industries are well known — oil, gas, coal, securities and investment, banking, and agribusiness, to name a few.

Each is enabled, for example, by the Federal Reserve system with near zero-interest money and Congress with its subsidies to giant industrial farms and its liberal tax breaks for corporations.

To put this in perspective, it is estimated that while the government spends about $60 billion annually on social welfare programs, it spends over $90 billion annually on corporate welfare. This does not include the many “no-bid” high-dollar federal contracts awarded to corporations each year.

These issues are not limited to the federal government. State and local governments, in their attempts to attract businesses, step all over each other to grant tax abatements, fee exemptions, and infrastructure enhancements to corporations savvy in the manipulation of local authorities competing for their good graces.

This disgorgement of corporate welfare payments, only to later have corporations change locations for larger welfare payments in other states, other cities, and other employment markets, is a reflection of corporate greed at taxpayer expense.

The departure of AT&T headquarters and the current frenzy to lure Tesla Motors to San Antonio are excellent examples of this ritual.

The situation is becoming so obscene, that business-oriented and socially conscious politicians, both conservatives and liberals, are beginning to collaborate in stemming the excesses of manipulated “free-market” economic mechanisms.

The result is the rise of a popular movement toward less dogmatic conservative leaders not afraid to negotiate in good faith with their more liberal colleagues. A leader in this movement is the former governor of Florida, moderately conservative Jeb Bush.

He is the future of bipartisan politics, and there is plenty of room for others.

David Brunori, a contributor to Forbes.com, in his commentary, “Where is the Outrage over Corporate Welfare?” captured the essence of this issue, when he wrote, “I don't blame the corporations.... They act rationally. If someone gives you $1 billion, you take it. The blame lies with us. The sheer size of the corporate welfare system should spark outrage whether we are conservatives, liberals, or libertarians.”

“Nuff” said.

Bennie Wilson is a senior lecturer in management at the University of Texas at San Antonio.